Bank of Cyprus to auction off convertible bonds

Bank of Cyprus Public Company Ltd announced that in relation to the issue of Convertible Bonds 2013/2018 (the “Convertible Bonds”), as at close of business on 28th July 2008 the Bank had received applications amounting to a total of €487 mln. These subscriptions relate to applications received by Eligible Shareholders (on the basis of €1 Convertible Bond for every share held as at 7 July 2008) and by other investors (including shareholders) who submitted irrevocable applications for subscription of the rump Convertible Bonds at the Strike Price Range of €1.00 – €1.01 pursuant to the relevant provisions of the Securities Note dated 25th June 2008.
The Securities Note dated 25 June 2008 issued by the Bank relating to the issue of the Convertible Bonds states that:
In the event that the Convertible Bond Issue is not completely covered by the Eligible Shareholders, the Board of Directors will distribute any unsubscribed Convertible Bonds (the “rump Convertible Bonds”) at its absolute discretion.
For this purpose a book building procedure will be applied in Cyprus, Greece and abroad; in the form of competitive or uncompetitive bid/applications; furthermore irrevocable applications from Interested Investors (shareholders or not) will be submitted in parallel to the Subscription Period for the Convertible Bonds in Greece and in Cyprus.
Accordingly, the Bank announces the following:
– Irrevocable applications from Interested Investors for the rump Convertible Bonds will continue to be accepted at the Group’s branch network in Cyprus and Greece on 29 July 2008
– Institutional Investors and other interested investors (for an aggregate principal amount of at least €250,000) who wish to participate in the book building process will be able to submit offers to subscribe to the rump Convertible Bonds during the Book Building Procedure from 10:00 Cyprus Time (08:00 UK Time) until 17:00 Cyprus Time (15:00 UK Time) on 29 July 2008.
The Convertible Bonds, which are unsecured, subordinated bonds of the Bank, will be issued in an aggregate principal amount of up to €573.4 million and, unless previously redeemed, converted or purchased and cancelled, will be redeemed at 100% of their principal amount on 30 June 2018. The Convertible Bonds will bear a fixed interest rate of 7.50% for the first two interest periods (that is until 30 June 2009) and a floating interest rate thereafter, which will be set at the beginning of each six-monthly period and will apply to the specific interest period. The initial conversion price of the Convertible Bonds is €10.50 per share. The terms of the Convertible Bonds provide that the Bank may redeem all but not some only of the Bonds at their principal amount, together with accrued interest, on 30 June 2013, or on any interest payment date thereafter, subject to the prior consent of the Central Bank of Cyprus.
The rump Convertible Bonds are expected to price today.
Any rump Convertible Bonds not subscribed during the Book Building Procedure will not be issued and the issue size of the Convertible Bonds will be reduced accordingly.
In Cyprus and Greece, offers in respect of the rump Convertible Bonds should be submitted using the relevant Application Form and after contacting the following:
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Investors in Cyprus:
The Lead Manager and Bookrunner for Cyprus and Greece
The Cyprus Investment and Securities Corporation Limited (CISCO)
Eurolife House, 4 Evrou Street, Nicosia,
Investment Banking Department,
Tel.: +357 22 121800, Fax: +357 22 338801